Gokongwei eyes P30B bonds for Meralco stake

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The Gokongwei-led JG Summit Holdings Inc. is set to tap the bond market, planning to raise up to P30 billion to fund its acquisition of all the remaining stake of San Miguel Corp. (SMC) in the Manila Electric Co. (Meralco).

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JG Summit informed the Philippine Stock Exchange on Thursday that it has just filed a registration statement with the Securities and Exchange Commission in relation to its proposed issuance of retail bonds, in the aggregate principal amount of up to P20 billion with an oversubscription option of up to P10 billion.

The net proceeds from the bond issuance, according to the listed conglomerate, shall be utilized by the company to partially finance its acquisition of Meralco shares and for general corporate purposes.

BDO Capital and Investment Corp., BPI Capital Corp., First Metro Investment Corp., The Hong Kong and Shanghai Banking Corp., and Standard Chartered Bank will act as joint lead underwriters.

Three days ago, JG Summit raised P8.8 billion via an overnight equity sale. The proceeds from the share sale will also be used to partially fund the acquisition of SMC’s remaining stake in Meralco.

The equity sale was priced at P40 a share through a placement of 98.1 million treasury shares and an additional placement of 121.9 million common shares from selling shareholders.

In early October, JG Summit announced that it will purchase the entire stake of SMC in Meralco for P72 billion. The remaining entire stake of SMC in Meralco amounts to about 27 percent of the power distributor’s total outstanding shares.

The stake that was sold to JG Summit was those held by SMC and its units San Miguel Pure Foods Co. Inc. and SMC Global Power Holdings Inc.

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